The following balance sheets were prepared for Adam Corporation and Best Company on January 1, 20X2. just before they entered into a business combination:

Adam acquired all of the assets and liabilities of Best Company on January 1, 20X2, in an exchange of common shares treated as a purchase. Adam issued 8,000 shares of stock to complete the business transaction.
Required Prepare a balance sheet of the combined company immediately following the acquisition assuming the market price of Adam's shares was:

a. $60 at the date of issue.

b. $48 at the date of issue.

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Item Book Value Cash and Receivables Inventory $150,000 Adam Corporation Fair Value $150,000 Book Value $ 90,000 300,000 380,000 Buildings and Equipment 600,000 430.000 Less: Accumulated Depreciation (250,000) Total Assets $800.000 $960.000 Best Company 70.000 250.000 (80.000) $330.000 Fair Value $ 90,000 160,000 240,000 Accounts Payable Notes Payable Common Stock: $8 par value $ 75,000 200.000 $ 75.000 215,000 $ 50,000 30,000 $490,000 $ 50.000 35.000 180,000 $6 par value Additional Paid-In Capital 140.000 Retained Earnings 205.000 Total Liabilities and Equities $800.000 90,000 55.000 105,000 $330.000